Ladenburg Thalmann initiated coverage of Artelo Biosciences (NASDAQ:ARTL) with a “buy” rating and price target of $7. The stock closed at $1.63 on Feb. 11.
Artelo is developing first-in-class, proprietary therapeutics targeting the endocannabinoid system.
Analyst Michael Higgins writes that the company has three assets in large indications: ART27.13, a CB1/CB2 receptor agonist for use in cancer anorexia, with expansion possible in other anorexic disorders; ART26.12, a selective FABP5 inhibitor for breast and prostate cancers, initially; and ART12.11, a proprietary cocrystal of CBD:TMP protected by a first-ever composition of matter patent.
“In our view, Artelo’s pipeline not only includes three first-in-class assets in validated pathways to reduce development risk, but like Jazz Pharmaceuticals and its acquisition of GW Pharmaceuticals for its CBD-based revenues and pipeline, investors are beginning to appreciate Artelo’s pipeline of novel assets, which include a rare composition of matter protection in plant-based medicine,” Mr. Higgins said.
In particular, “we suspect larger pharma [will or will have] interest in Artelo’s assets, especially its FABP5 inhibitor (ART26.12) and its CBD cocrystal (ART12.11),” he added.
Mr. Higgins said that while the value of each asset is likely to increase over the next two years, “we find current values of each asset are worth more than Artelo is trading for today.”
